Understanding your Electric Bill

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We pay our electricity bills each month, but few actually
understand what it is our bill represents. What exactly is a Volt, Amp,
Watt, or kiloWatt-hour (kWh), and what are we paying for? To create a better
picture in your mind, imagine electricity as water flowing down a river.
To figure out the total amount of water flowing, we need to know not only the
actual size of the river, but also how fast the water is moving. If we
know both figures, we can figure out how much water has gone by in a
specific amount of time.

Roughly
speaking, "Volts" can be equated to the speed of the river flowing. For most intensive purposes, households use
120 Volts, with the exception of a few large appliances. "Amps" represent the quantity of
flowing electrons or the overall size of the river. The total electricity "flow rate" (power, or energy) is calculated up by
multiplying Volts by Amps, which is called "Watts". Most appliances are rated in terms of "Watts" or "Kilowatts", simply meaning, a thousand
Watts. If your dryer runs at a rate of 1 kilowatt, all we need now is a time to figure out how much electricity it
has used. For example, if we ran the
dryer for one hour, it would consume a total of 1 kilowatt-hour. Or, if we had a smaller appliance that uses
electricity at a rate of 100 Watts, it would take 10 hours to equal 1
kiloWatt-hour.

This brings
us to what you're paying for at the end of each month. When your utility reads your home's meter,
it's reading the number of kWh's you've used cumulatively throughout the
month. Depending on your location,
you'll pay around $.11 per kWh. In some
areas, you'll pay more for electricity that's used during peak demand hours.

To see how you can be more energy efficient at home, take our energy quiz.